money-for-gradesThis is the second post in my series about why grades suck. This post examines the economic arguments for and against using grades to assess academic (or really any) work.

 THE Argument for Using Grades

Economics provides the one and only valid argument for using grades. There’s only one, and it’s simple: it’s an efficient way to provide feedback to a large number of students (and other stakeholders–parents, legislatures, colleges, employers) in a short period of time. While the early proponents of this argument in the 19th century (when the use of grades really became prevalent) were aware of grades’ flaws and shortcomings, they wrung their hands and argued (probably justifiably) that there really was no other way to do it given the student-teacher ratios and the need to make a case for the value of schools and schooling at all. Keep in mind that the US was still predominantly agrarian at this point in history, and many people did not see a need for anyone to acquire more than basic reading and mathematical skills, if that. It is also important to note that this is the time of the Industrial Revolution, and the standardized, one-size-fits all, assembly line approach to evaluation seemed extraordinarily appropriate given the times.

In short, the primary argument in favor of using grades is economic. I mean, think of the alternative to letter and number grades. Do we really expect teachers to write full essays describing each student’s strengths and weaknesses in detail? Who has such time? How could we afford to pay the number of people it would take to accomplish such a task?

As such, it should be no surprise that the loudest debates about how we grade (not if we grade–that’s taken for granted) tend to be couched in economic terms, e.g. grade “inflation.” (BTW, grade inflation is a myth.) People also try to correlate grades and GPA to likelihood to get a (good) job, lifetime income potential, etc. All of them are primarily economic arguments and do not deal in a truly substantive way with the negative impacts that grades have had on nearly everyone in our society.

Economic Arguments Against Using Grades

This is not intended to be a comprehensive treatment of the economics of grades, but just a brief introduction to some of the basic arguments, starting with one of the most basic of economic principles: the law of supply and demand.

To restate the law, when supply is high and demand is low, prices fall.  When supply is low and demand is high, prices rise.  In the case of grades, the conventional argument would be that A’s are (or should be) a scarce commodity, and therefore the price of acquiring one, i.e. student talent and/or effort should be high.  In the case of grades, this is a bogus argument.

First of all, A’s are not a scarce commodity. From the instructor’s standpoint, they cost nothing to produce and there is a limitless supply. (If they were, lot of techers would be more creful bout wht they typed!) Not only can I assign as many A’s as I choose, but I’m not charged $50 for every A that I assign, $25 for B’s, $10 for C’s etc. If anything, it’s what economists would refer to as an artificial scarcity, which is when a producer intentionally destroys, withholds or declines to produce goods in order to keep prices high.  I guess it’s not unheard of for instructors to intentionally limit the number of “available” A’s in order to scare students into working harder, but I’m not sure that a scare tactic is really a valid argument for using grades.

This begs the question of what is the value of an A?  I’m sure someone has tried to quantify it in monetary terms, but a short thought experiment will show how ludicrous this is.  Is an A in organic chemistry worth the same in 2014 dollars as an A in scuba diving?  How about a 2.9 GPA in the College of Business as opposed to a 3.8 in the English Department?  The artificiality of trying to make such value comparisons quickly devolves into the absurd.

But doesn’t that point out the value of GPA for getting good jobs?  At least one study done at Virginia Tech found that about 42% of the time, college recruiters did not even appear to consider GPA at all in deciding whether or not to award an on-campus interview.  In 17% of the cases, it appeared that a higher GPA decreased students’ chances of getting the interview.  Of course, this still means that in over 40% of the cases, GPA was at least somewhat considered.  Some companies do have GPA cutoffs for new hires. (After reading this, though, you may not want to work for those companies.)  But it’s important to keep in mind that your GPA will only possibly be important for your very first job upon graduating.  After that, no employers will ask for it.  They’ll make their decision to hire you or not based on your previous job performance (possibly). So it’s important to keep in mind that your GPA may not be as important in getting a job as you’ve been led to believe.

There is one important exception to this: graduate school.  Graduate schools absolutely and nearly universally use GPA in their admissions criteria.  So if you plan to go to grad school, an economist and I would agree in advising you to strive to get as high a GPA as possible.  An unethical person would add “by any means necessary.”  This overvaluing of grades is actually a primary source of academic dishonesty and friction between teachers and students, but we’ll get to that in the section on motivation.

The Bogus Metaphor of School as Workplace

In the attempt to make school more like the “real world” many people like to say that going to school is a student’s “job” and that their “pay” takes the form of grades. This is a bald attempt to justify in economic terms why students should work hard, but there are a number of reasons why the metaphor rings hollow.

First of all, for anyone who is in college or private school, students are paying money for the opportunity to be in school. The idea that someone would pay a company for the opportunity to work there is nonsensical. Companies pay employees–not the other way around.

Second, whereas the employees at a company work together to produce a product or provide a service, students in a school are not working together to produce anything. If anything, the students are the consumers of a service and working independently of one another. Collaboration is actually cheating in many instances. It actually might be a good idea to turn schools into places where people work together to produce something, but currently performance and accountability are at the level of the individual students and they are explicitly in competition with one another.

Third, given that school attendance is compulsory throughout the country, if school is in fact a “job” then it must be considered slavery. Primary and secondary school students have no choice about whether or not to attend school, and they have little, if any, choice about what they study and the ways in which they study and are evaluated. They receive no true monetary compensation–quite the reverse, they are asked to pay for many aspects of the experience.

As such, it is no surprise that students are underwhelmed by the argument that school is their job, and less than ecstatic when their “payment” comes in the form of grades. We may try to sell it as such for the sake of “preparing them for their future,” but young people, who are bombarded daily with attempts to sell them things, are pretty savvy to the notion that this is a bogus metaphor.

Grades ≠ Money

Grades are not money and have little, if any, intrinsic value. We should try to stop shoehorning education into just another segment of our economy. It is not.

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One Response to The Mother of All Token Economies: Why Grades ≠ Money

  1. […] creates and cultivates fear (which, according to Deming, we need to drive out). Unfortunately, our educational system and our economy are firmly steeped in power relationships… so we’re not accustomed to truly cooperative relationships. (In fact, being reliant on […]

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